Difference between revisions of "Market power"
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| − | + | '''Market power''' means the ability of a company to control prices or exclude competition. This term is commonly used in [[antitrust]] lawsuits, and has been repeatedly cited by judges in 255 cases in 2005 and 2006. It is the central term in [[antitrust]] litigation because the more market power that a company has, the more it can restrain trade. | |
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| − | + | Monopoly power is sometimes used as a synonym for market power, but a firm can have market power without being a monopoly. | |
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| − | + | One definition of market power was explained by the [[Supreme Court of the United States]] as follows: | |
| − | + | {{cquote|“Market power is the ability to raise price profitably by restricting output.” Areeda & Hovenkamp §5.01 (emphasis added); ''accord'', ''Kodak'', 504 U. S., at 464, 112 S. Ct. 2072, 119 L. Ed. 2d 265; ''Business Electronics'', 485 U. S., at 723, 108 S. Ct. 1515, 99 L. Ed. 2d 808. This Court will “not infer competitive injury from price and output data absent some evidence that tends to prove that output was restricted or prices were above a competitive level.” ''Brooke Group Ltd.'', 509 U. S., at 237, 113 S. Ct. 2578, 125 L. Ed. 2d 168.}} | |
| − | + | ''Ohio v. Am. Express Co.'', 138 S. Ct. 2274, 2288 (2018) | |
| − | + | [[Category:Economics]] | |
| − | + | [[Category:Antitrust]] | |
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Latest revision as of 20:42, February 27, 2021
Market power means the ability of a company to control prices or exclude competition. This term is commonly used in antitrust lawsuits, and has been repeatedly cited by judges in 255 cases in 2005 and 2006. It is the central term in antitrust litigation because the more market power that a company has, the more it can restrain trade.
Monopoly power is sometimes used as a synonym for market power, but a firm can have market power without being a monopoly.
One definition of market power was explained by the Supreme Court of the United States as follows:
| “ | “Market power is the ability to raise price profitably by restricting output.” Areeda & Hovenkamp §5.01 (emphasis added); accord, Kodak, 504 U. S., at 464, 112 S. Ct. 2072, 119 L. Ed. 2d 265; Business Electronics, 485 U. S., at 723, 108 S. Ct. 1515, 99 L. Ed. 2d 808. This Court will “not infer competitive injury from price and output data absent some evidence that tends to prove that output was restricted or prices were above a competitive level.” Brooke Group Ltd., 509 U. S., at 237, 113 S. Ct. 2578, 125 L. Ed. 2d 168. | ” |
Ohio v. Am. Express Co., 138 S. Ct. 2274, 2288 (2018)